South Africa lowers economy growth projection by half

The South African government has lowered its economic growth projection for 2014 by almost half, but vowed to work on improving the country's export performance.

"Honorable Speaker, when we tabled the 2014 budget in February we expected the economy to grow by 2.7 percent this year," Finance Minister Nhlanhla Nene told parliament on Wednesday while delivering his medium term budget policy statement.

"The revised estimate is 1.4 percent," he said.

Nene, the country's first black finance minister, said the downward revision is partly because of a weak global environment, including the slowdown in Europe, China and other emerging economies, which are South Africa's main trading partners.

"But it also reflects obstacles to our own development ranging from energy constraints, labor market disruptions, skills shortages, administrative shortcomings and difficulties in our industrial transformation," he added.

This year South Africa suffered a prolonged strike in the platinum mines sector as well as another in the metals and engineering sector.

"As emphasized by President [Jacob] Zuma in opening the fifth Parliament, we need economic growth of around 5 percent a year to decisively reduce unemployment and poverty, and to transform our social and economic order," said the finance minister.

He asserted that the budget framework he was tabling is focused on restoring balance to the nation's finances, bolstering investment and achieving better value for money in public expenditure.